A friend with a successful b-to-b eCommerce business posed a simple question to me: “If you could only do one or two things for an ecommerce business (that sells actual products rather than a service or software or something) to increase customer retention, what would you recommend?” Here are my recommendations, in priority order. What are yours?

Place your web address, with a compelling call-to-action, directly on the products being shipped. Make this call-to-action as time-sensitive as possible. Don’t be lame and do include a deadline. NO: “Fill out our warranty card online.” YES: “Set up an email reminder on our site so you’ll never forget to replenish. Do it by [date] and we’ll give you an automatic 10% off your next purchase, and free shipping!” Enclose a card reiterating the offer. This may be your last best shot at creating a repeat customer.

Follow up your shipment with a “We’d like to know if your products are fitting your needs” email or letter. Include a customer satisfaction survey that rewards them with something they can use with an immediate order. If you’re using snail mail, naturally you should enclose a printed catalog. Draw their attention to related items that can be found within it (or if it’s an email, found on the eCommerce site). If possible make the effort self-financing by generating an immediate re-purchase. Use the Net Promoter Score (NPS)* methodology in the satisfaction survey, to track current loyalty for this customer and as a way to track overall likelihood to repurchase as a trend over time.

Those are my recommendations. What are yours? Comments are especially welcome, for me and my friend.

*I’m including this because, although NPS has fallen out of favor as a predictor of company growth, and in other ways is definitely not perfect, I agree with Dale Wolf in that I like its simplicity. You need to use something as a predictive baseline that can (hopefully) be compared with real loyalty measurements. The NPS methodology, associated with Satmetrix Systems, Inc. and Fred Reichheld, is good enough to do the job.

There’s a trick to conducting pay-per-click (PPC) campaigns on a shoestring. Larger campaigns buy popular keyword phrases. They consequently generate a torrent of clicks. Smaller campaigns, on the other hand, must make similar decisions success using a comparative trickle of data. So how do small-time marketers know when they have enough information to make reliable decisions?

This is coincidentally similar to the rule of thumb I’ve used in direct mail campaigns. For smaller mailings, direct mail veterans have known that you could start to be confident about results once you’ve received roughly 20 of them.

A statistician friend once described these critical mass numbers as the thresholds where there is enough information to get simple yes / no answers about whether a campaign is succeeding. He compared them to when you watch a dot of light coming at you from a distance during an evening drive. This threshold is the point where you can first tell whether you’re seeing a single headline, from an approaching motorcycle, or from a car’s pair of headlights.

It’s still a limited amount of information, but knowing what’s coming at you quickly and definitively can be useful both in driving and in direct response.

The world’s recent arms race has lessons to teach about modern marketing. The U.S. and Russia (then the U.S.S.R.) spent a fortune on new weapons during the Cold War, each afraid it would get trumped by the other in battle. Tactics — what weaponry to use — took priority over strategy — when and how to use them. Jonathan Schell’s book of that time chillingly described what was at stake: The Fate of the Earth.

In spite of lessons from both ancient and recent history, folks who wage wars typically get hung up on gizmos. So do those who “wage commerce.” Are you addicted to tactics over strategy? Take this test:

Can you list three narrowly-focused strategies for doing an end-run around your competitors? Give yourself one point for each, and add a point for each that uses “out-of-vogue” technologies or tactics, such as direct mail or email.

Have you recently watched a competitor use a tactic and asked, “What’s their plan for using that?” Give yourself two points for looking deeply into the tactic. If instead of asking yourself that question, yours was “Cool! How can we get us one of those?,” dock yourself two points.

Was your last strategy something you first imagined being executed using older or lower-tech methods, but they turned out too slow or costly? Give yourself one point.

Do you find yourself, “Spending eight hours on tactics and five minutes refining your strategy?” (A tip of the hat to Seth Godin’s blog today for this one.) Take away three points.

Finally, have you rejected a proposal lately because the authors didn’t do a clear job of linking their most gee-whiz tactics to the strategy you outlined in your RFP (request for proposal)? Give yourself three points. Conversely, if your RFP did not explicitly describe your strategy, subtract four points.

Tally things up and pencils down. If your final score is less than three, you may be a Marketing Tactic Addict. If it’s a negative number, seek professional help. Addiction to the latest tactics — whether they’re social media ploys, video podcasts or whatever — are empty calories at best and brand poison at worst.

Remember that the attack that brought our country temporarily to its knees didn’t come from a thermonuclear strike made by a hostile country. It came from a networked, amorphous group — one that sneaked into our infrastructure and turned it against us with explosive results.

The enemy used nothing more than box cutters and a willingness to be martyred. It’s a chilling example of simple tactics aligned behind a killer strategy.

A few days ago a team crossed the finish line in a race to develop the best algorithm for the Netflix recommendation engine. It wasn’t easy. It turns out that the type of business logic once carried exclusively between the ears of a good video rental clerk is hard to automate. Netflix decided they needed help. They placed a price on improving suggestion results: One million dollars for a 10% or better improvement.

Teams around the world got to work. It took them three years to reach the 10% milestone. And 30 days after one team did, the best results over that threshold took the prize. Here’s the leaderboad.

We can learn from these teams’ struggles. The leaders who were interviewed all agree they couldn’t have done it without an interdisciplinary approach, tight collaboration and a willingness to be wildly creative. According to a piece in the New York Times, “the formula for success was to bring together people with complementary skills and combine different methods of problem-solving.”

In the physical world, we know that the more hands you have to lift something, the heavier an object you can lift. But most of us in our digital, information age careers, have a difficult time imagining that this synergy is possible when the heavy lifting is computational. We need to think again.

Quoted in the Times piece, David Weiss, a member of one of the teams competing, said, “The surprise was that the collaborative approach works so well, that trying all the algorithms, coding them up and putting them together far exceeded our expectations.”

We’ve seen it work with open source software and multi-player online games. Now we have a very public example that in the digital world as well, many hands make light work.

Forty years after putting a human on the moon, we’re faced with the same question we had that day: Now what? My vote is not moon colonization, or sending people to Mars. No, let’s do something really challenging — but arguably far more beneficial. Let’s finally deliver stellar mobile web experience.

I’m proposing this in light of the new study that finds typical mobile web experiences excruciating. The user experience research firm Nielsen Norman Group reports today in their usability studies that the typical success rate for users completing tasks on the mobile Internet was just shy of 60 percent, compared to an average PC-based browser success rate of 80 percent.

Jakob Nielsen says of these findings: “The phrase ‘mobile usability’ is pretty much an oxymoron … [watching users] suffer during our user sessions reminded us of the very first usability studies we did with traditional websites in 1994.”

And who might these winners be? A little over a week ago, the team called “BellKor’s Pragmatic Chaos” delivered a 10.05% improvement. The Netflix Prize competition has now declared “last call.” The other teams have thirty days to improve on the winning algorithm.

Two things strike me about this competition. The first is how difficult it is to predict our tastes in films. I’m frankly amazed that anyone is taking the prize. (Remember, teams have been trying for three solid years!)

The second and more important take-away is this: You can never be content with your present efforts to satisfy customers. They can always be improved — and they should be improved. Even when the cost is surprisingly steep.

Newton’s Third Law of Motion contends that for every action there is an equal and opposite reaction. I’ve been observing for some time this paradox: The more networked we become, the more we rebel against impersonality. We yearn for ways to connect in the physical space. The latest example is from the shrewd publicity efforts behind Moby’s latest album. New York Magazine reports the following:

He promoted his latest, Wait for Me, by booking a spa so that journalists [including some extremely tech-savvy writers], could listen while getting massages.

How ironic that the way to these journalists’ hearts should be through unkinked necks and loosened shoulders. Not that such novel — and decidedly low-tech — promotions of new albums are particularly new. You may recall the impact that Trent Reznor (a.k.a., Nine Inch Nails) had when he leaked new songs to a pre-release albums through MP3s loaded on USB sticks left in the restrooms of nightclubs. That was more than two years ago. (Here’s an account of that promotion, on MediaPost. Registration is required.)

My take on Moby’s high tech / high touch ploy is simple: If you’re trying to break through the drone of network buzz and isolating keyboarding, look to its extreme opposite.

Marshall makes some excellent points (he’s not @WebMetricsGuru for nothing!), including this one: “Social Media isn’t really designed, at this time, to analyze Acquisition or Retention – but Web Analytics, is — and I maintain this is one of the strongest arguments to merge the two, in a formal way, rather than in an informal way.”

Datamining and CRM

How do you begin merging these data in a “formal” way? Tools are emerging to allow for the mining of conversations, and linking them where possible to a CRM database. Here’s Marshall’s take on this process:

David Berkowitz talks about Target Audiences, but you’d first have to figure out what your Target Audience is for your Brand or for a particular product or promotion of your Brand – then do CRM datamining using house database lists, or the Social Media CRM outreach to collect names and classify them according to Target Audience Segmentation — best done with data analytics. Let’s say, that for the purposes of this post, my article on Entrepreneur.com on Learn to Measure Your Web Presence using Unbound Technology or Rapleaf, is the way to go.

If you’re a mom-and-pop shop, you’d do nothing as elaborate, more just Twitter research, much as I’ve shown above, but if you’re Zappos, or Dell, well … that’s another story — the story I tell in Learn to Measure Your Web Presence and others, like it.

Of course, a big brand can make a lot of money whereas the mom and pop shop, probably won’t — so a big brand can afford to spend a lot of money on data mining — and it’s well worth doing because of the potential money and value that can come from it.

Scarcity of Resources

The biggest constraint in doing this sort of work isn’t technology. It’s time. Even properly guided, the process takes many people-hours, and that is a resource in short supply for most businesses today. I see a major challenge in the linkage between prospects / customers and Twitter profiles. (Ack!, I can hear you yell. Yet another datapoint to capture in our CRM databases: The client’s Twitter handle!)

But it is becoming clear that this is an area where a business should focus some of its energies — assuming the business passes David Berkowitz’s Ten Ways test.

Years ago, Don E. Schultz co-wrote Measuring Brand Communication ROI. In this marketing chestnut, he and his co-authors built a surprisingly relevant model for tracking spending and estimated returns for each brand communication (How old is this book? The included Excel file was loaded on a 5.25″ magnetic diskette). A huge category — and ROI black hole — was customer service.

Twitter is a communication channel more than a marketing tactic, and this channel has more to do with customer satisfaction and brand education than driving sales. It’s another touchpoint and nothing more.

But like email and other important touchpoints, it should be measured. Conversations like the one taking place today will help determine how this measurement takes place and to what end.

I’ve recently disparaged the Kabuki dance of trade conferences. But even I admit they have their place. In fact, today I find myself especially sorry I won’t be able to make next week’s OMMA Metrics and Measurement Conference in New York’s Yale Club. In one day those attending it will hear from some of the industry’s leaders, and I frankly cannot find a single presentation where I’d find an excuse to duck out. That’s quite a feat.

One Day Event, Tuesday, Jun 09, 2009

9:00 AM

Welcome & Opening Remarks

MC

Jodi McDermott,Director, Data Strategy,

Clearspring Technologies

9:15 AM

Keynote- The State of the Union for the Metrics Industry

We are well past the first 100 days of 2009 and a lot has changed, yet nothing has changed. New technologies and social media have invaded the online channels that we’ve become accustomed to. Yet the foundatiolid. Jeffrey Eisenberg, CEO of FutureNow, will walk us through a report card of the online measurement industry and address what’s next and what we need to do better as marketers, practitioners and vendors in order to support the shift of ad dollars from offline to online.

Keynote

Jeffrey Eisenberg,Co-founder & CEO,

FutureNow, Inc.

9:45 AM

Audience Measurement

How is the role of the audience measurement firm evolving? We’ve got panel, direct measurement and hybrid approaches to address today’s industry challenges. Who’s on top? Which approaches should advertisers and markw the approaches differ and the impact differences make on the numbers we are trying to study. We will also touch on the new IAB industry guidelines and what they mean to the standardization of reporting on audience metrics.

Moderator

Joe Laszlo,Director of Research,

Interactive Advertising Bureau

Panelists

Josh Chasin,Chief Research Officer,

comScore

Adam Gerber,Chief Marketing Officer,

Quantcast

Yaakov Kimelfeld,SVP, Director, Digital Research & Analytics,

MediaVest

Mainak Mazumdar,SVP, Global Measurement Science, Emerging Media,

The Nielsen Company

10:30 AM

Coffee Break

10:45 AM

The Analytics Food Chain

How do you use audience measurement, campaign analysis tools and web analytics to plan and measure the efficacy of your marketing campaigns? With standards set by various organizations and new technologies providindecisions from. This panel will focus on understanding the differences and synergies of panel and census data from the various parts of the analytics food chain – what to use and when.

Moderator

Jodi McDermott,Director, Data Strategy,

Clearspring Technologies

Panelists

Andy Fisher,VP, Analytics,

Razorfish

Dennis Mortensen,Director of Data Insights,

Yahoo!

Judah Phillips,Senior Director, Global Site Analytics,

Monster Worldwide

Greg Smith,Chief Operating Officer,

Neo@Ogilvy

Bill Tancer,General Manager of Global Research,

Hitwise

11:30 AM

Measuring Video and Virality

The video market is exploding with numerous vendors, business models and technology. What are the metrics and how do they fit into measuring user engagement and advertising models within video? This panel will exploity, and tying the stream back to site activity and customer conversion.

Moderator

Tania Yuki,Director, Product Management,

comScore

Panelists

Scott Ferber,Chairman & Chief Executive Officer,

TidalTV

Jayant Kadambi,President and Co-Founder,

YuMe

Matt Langie,Senior Director, Product Marketing,

Omniture Inc.

Keith Richman,CEO,

Break Media

Brian Shin,CEO,

Visible Measures

12:15 PM

Luncheon

1:30 PM

Keynote: Measuring Madison Avenue

Campaigns have moved well beyond the impression and click in today’s distributed and fragmented world of online advertising. Interactive campaigns that include the ability for users to share, respond and mashug dollars. Curt Hecht, President of the VivaKi Nerve Center, will take attendees through the measurement challenges that are facing agencies as they introduce new methods and new media for reaching their client’s target audience.

Keynote

Curt Hecht,President,

VivaKi Nerve Center

2:00 PM

Campaign Attribution

If the click is dead, how do I know how to attribute success to my campaign? Should it be on the first impression view, the click or the viewthrough? As debate continues in the industry over how to gauge campaign sends are emerging and if there is a solution to the question that has been plaguing the industry for years.

Moderator

Joe Mandese,Editor in Chief,

MediaPost

Panelists

Michael Brunick,VP Media Technology,

Cadreon

Ari Buchalter,Chief Operating Officer,

MediaMath

Adam Goldberg,Co-Founder and Chief Innovation Officer,

ClearSaleing

Katrin Ribant,Director of Product Development,

Artemis, Havas Digital

Esco Strong,Senior Group Manager, Atlas Institute,

Microsoft

2:45 PM

When The Numbers Speak For Themselves

Do you know when to pull the plug on a campaign that is performing poorly? Or how to take action on the data once you have the results? Taking the metrics and turning them into actions is often a forgotten or weaknd optimization in meeting the goals of your marketing initiatives.

Moderator

Joshua Koran,VP, Targeting and Optimization,

ValueClick

Panelists

Srishti Gupta,Senior Partner, Insights & Analytics Director,

MediaCom Interaction

Ben Seslija,Senior Director, Acquisition and Analytics,

Clickable

Mark Wachen,Managing Director,

Autonomy Optimost

3:30 PM

Coffee Break

3:45 PM

Integrating Online and Offline Data

Tying the shelf or online purchase to the campaign data that you collect is a great concept, but not easy to implement in reality. This panel will expose you to companies who have e stronger relationship with their customers and control costs.

Moderator

Doug McFarland,Co-CEO,

Dimestore Media

Panelists

Joe Apprendi,CEO,

Collective Media

Jarvis Bowers,VP, Research and Analytics,

ESPN

Roman Bukary,VP, Marketing & Business Development,

Truviso Corporation

Ryan Christensen,VP, Media Operations,

Brand.net

Jason Harper,Group Director, Marketing Intelligence,

Organic, Inc.

4:30 PM

The “Ins and Outs” of Measuring Social Media

Are your customers on Twitter, Facebook and MySpace? You are naïve if you say “no”. People of all demographics are engaging with each other and brands online like never before. Marketers trying to reach this audien this panel we will cover topics such as application installs, engagement, widgets, blogs, corporate Twittering and more.

Moderator

Nick O’Neill,Founder,

Social Times Inc.

Panelists

Maurice Boissiere,Vice President, Client Solutions,

Clearspring Technologies

Sarah Hofstetter,Vice President, Emerging Media & Client Strategy,

360i

Ed McLoughlin,Managing Director,

MindShare

Jerry Needel,Senior Vice President, BuzzMetrics Product Leadership,

Nielsen Online

Jason Richman,Director, Digital Product Strategy,

NBC Universal

Are you attending? If so, please contact me and let me know your thoughts on this first-ever event. But don’t go on too much about how terrific it was. That will just break my heart.

It’s June 1. That marks the beginning of my second annual Online Community Month. Last year’s handful of June posts discussed how technology has affected our society 10 years after the publication of the chilling book, Bowling Alone.

Also, I and a few experts on the subject, talked about historical trends and recent measurements in what has been termed social capital.

Over the course of this month, I’ll be focusing more on how technology is helping communities come together from two perspectives:

How is micro-blogging connecting unlikely groups of individuals for the common good?

How is technology making remote work more “social,” and doing more to forge the type of friendships and camaraderie we usual associate with physicial workplaces (of the fortunate!)

More discussions of marketing technology ROI

Along the way will be a few suprises. Just as important for my regular readers, you can still expect news and trends directly related to digital marketing will also continue to be explored in Jue — all filtered through the wide-ranging experiences and passions of a Midwestern marketing wonk.

Placing value on non-buying visitors

Start the valuation process with the obvious: Visitors who immediately convert to a sale. But then keep going. Apply common sense numbers to those visitors who do not immediately buy. And why not? Visitors may come back two, three or more times before making a purchase. Like a fish that nibbles before biting, these “lost” visits aren’t so lost after all. They should be fairly depreciated, not totally ignored.

We try our hardest to allocate orders to the advertising vehicle that caused the order, seldom considering a series of events.

Take paid search as an example. Assume that a paid search campaign results in a 3% conversion rate and a $100 AOV [Average Order Value]. We run a profit and loss statement on the 0.03 * 100 = $3.00 demand generated by the campaign, factoring in the cost of the campaign.

What about the 97% of visitors who did not purchase?

Hillstrom asks, “What if you had this data?”:

Of those who are left [i.e., 97% of the base], 50% will visit the website again within one week, with 3% converting, spending $100 each.

Of those who are left, 50% will not visit again. Those who are left will visit again within three weeks, with 3% converting, spending $100 each.

Of those who are left, 50% will not visit again. Those who are left will visit again within one month, with 3% converting, spending $100 each.

Of those who are left, 50% will not visit again. Those who are left will visit again within four months, with 3% converting, spending $100 each.

Of those who are left, 50% will not visit again. Those who are left will visit again within six months, with 3% converting, spending $100 each.

He goes on to explain:

There is value in each case, value that most of us choose not to measure.
When I iterate through the five cases above, I calculate an additional $2.75 of future visitor value. [I get $2.68 in my number-crunching, as the number in the lower right of the graphic shows. Here’s my math in a Google Spreadsheet.]

In other words, we measure the $3.00 generated by short-term conversion. We don’t always measure the $2.75 of future conversions.

Now there may be additional expenses associated with the $2.75 number — that customer might require additional paid search expense or might use a shopping comparison site, whatever. So we need to run a true profit and loss statement on the additional $2.75 generated by future visits.

If each first-time visitor (one that doesn’t convert immediately) is worth $0.30 profit over the next twelve months, you think differently about attracting visitors, don’t you?

I agree. The BrandWeek article I linked to in the first paragraph said that the CMOs surveyed, “Expressed an awareness of digital’s potential, along with a recognition that they weren’t close to tapping it.”

Building sales models that take into account the messy realities of online behavior is one way we can start.